To give people an idea of how these projects work, in this blog I want to give you a breakdown of a project done by the South Worcester Neighborhood Improvement Corp (SWNIC), of which I am a board member. Here is a general breakdown of the finances of the Cambridge/Hacker Street project, and is quite similar to how the other projects are done.
My numbers may not be to the penny, but they will give a fair an accurate portrayal of the finances. In total, the cost to build these 12 owner occupied units was $2,050,000 broken out as follow:
- BankNorth Conventional Loan $1,400,000 in first position
- City, State, Federal Grants $650,000 (HOME, CDBG Funds, etc)
Keep in mind these grants (650,000) do not have to be repaid if a certain number of the 12 units (forgot the number-think 9?) were sold to low-mod income home-owners. In other words all you really need to break-even is to raise $1,400,000 from the proceeds, not the $2,050,000.
Problem is that only three units have sold for about $340,000 (TOTAL PROCEEDS FROM THE 3 SALES), which has lowered the BankNorth loan to approximately $1,060,000. SWNIC has no money to pay the interest on this loan and now Holy Cross, the co-signor on BankNorth loan, has been paying the interest on the loan, which is not a small number.
In total to date, $2,050,000 has been invested, of which $650,000 is our tax money, into Cambridge/Hacker Street and three owner-occupied units have been produced.
Next blog over the week-end following up on this.
12 comments:
Even when prices were at their peak during the boom, how does $340k for a freakin' *apartment* at Cambridge and Hacker translate to "low" or even "moderate" income level?
By what chicanery was this project even hatched???
Jeff:
Sorry. Let me clarify. Three units were sold and their COMBINED sales proceeds came to 340,000.
Right now there are 9 units unsold, $1,060,000 loan to BankNorth outstanding and some $650,000 of grants that do not have to be paid back as long as they units are sold to people of low to moderate means.
I will clarify this on the blog
Sorry,
Bill
Ah! Well, that certainly makes a lot more sense.
I've sat eating breakfast at the 101 Diner numerous times, looking out the window and wondering what's happening with that building across the street. My wife and I speculated that maybe one of the units was occupied, but recently she pointed out that it looked like at least two were occupied.
Now we know.
I had always assumed the SWNC was something similar to say the Senior center or the Youth center. Kind of a gathering spot for the local yockels where they maybe have a monthly crime watch meeting, a monthly meat raffle, a semi annual yard sale, a summer cookout, a Christmas party, and meet informally to maybe discuss local and neighborhood issiues and polititics and the like.
BTW, where exactly is this
center located?
Wow.....$2.1M total cost that equals $175,000 per unit..wonder how many sq ft in each unit ....they have to be very small and I'll bet the per sq ft price is through the roof, too. Why would anyone build units costing $175,000 each and then sell 3 of them for only $340,000 or about $115,000 a piece?
How does a somewhat neighborhood, fraternal type organization morph into a real estate developer?
Is SWNC similar to other non profit builders in that their CEO's are more in the nature of politicians than building & construction managers and business managers? If so, then thats one of primary reasons thsi building is in the situation its in now.
Should we blame Holy Cross as well........w/o HC's co-signing the loan the project would never have happened.
Will HC students be coming there eventually to rent until the remaining units can be offloaded to subprime borrowers.
What happens if HC and or Banknorth eventually endup owning the remainaing 9 vacant units......as neither entity is exactly a qualifying low to moderate income home owner..........$650,000 grant has to be repaid by who.....the City I guess.
If I am HC I would be telling the city that I am making a monthly PILOT PAYMENT of proabably somewhere between 6,000 to 12,000 per month depending on what the interest rate is on teh $1.4M loan......and if it's a construction loan then the amt is closer to the $12,000 per month.
Isnt SWNC the same group that now will be building more low income housing at teh site of the former City Builders supply off Cambridge St.
Whats the 101 diner............i never heard of it.........101 Cambridge St?
Bill, you got my nice autumn Friday off to a bad start with a topic that just makes my blood boil
When is the last time you had a good day?
Probably about a couple of years ago just before I first discovered this blog !!!!!!!!!!!
The Prozac is doing wonders though and if can just get on the City.....and get qualified for SSI all my other woes will be solved.
Enjoy the nice weekend weather.
Senor Jahn..whadaya think about putting a few of the men in my hood to work as school janitors..we give them housing, support their kid's and in turn we give them fulltime employment instead of new hires??
Paulie, I like that idea assuming we are both on the same page. Maybe they should go over to MLK Center and learn how to form a custodial service business and then attempt to sell themselves to the school dept as less expensive and more efficient than the current crew of custodisn who are city employees.
We have a new school dept CEO coming on board very, very soon I guess.....so they maybe open to some new ideas over ther eon Irving St......esp after they get their winter heating bills....and the best way to break the ice is as each city employed custodian retires or goes out on IOD then one of your guys new custodial company brings on one of their employees. That way the only city employees displaced are those retiring anyway.
Sounds good on paper.....huh..........try gitting your guys noses under the tent on this idea................chances are slim & none........but good thought for sure.
I have read that Springfiled has hired a company called Edu-Clean to perform custodial services for Spfld schools............you see Spfld was in receivership (still is?)or was it bankruptcy...............so the reciever has broad dictatorial powers to hire & fire as he sees fit to right the finacial ship.
Ask your GF Kate what she thinks of the idea.....LOL....and if she would back it even though she's now a councilor and a S.C. member anymore. Dont be surprised if you hear words like...... "family of School dept employees".......and the like.........
that is a different Kate posting on my blog...don't know who she is but not the same gal..
It is an interesting debate Senor Jahn..I have been banging the gong for some time now..we need to get equal value back on the services being provided to folks..I am reluctant to use the word dole but I do..many in my neighborhood are just this on the dole..they have no intenions of finding meaningful employment or changing their lifestyles..as long as they are not required to and we have few requirements for folks receiving a wealth of services that most American's have to work damn hard for.
You have to live in the environment to truelly understand the issue..and to know how much abuse is out there.
Senor Pualie, trust me I know of teh problems you speak of.
How about this one..........2 weeks ago I do a complete fall clean up and stack all teh yard waste in front of the house in the gutter.......tree trimiings, ooodles of leaves, etc.......1 week later and all the neighbors have piled onto my pile.......not a big problemo...........but one clown threw rubbish & garbage onto the pile..........next thing I know a guy show up and makes markings in the street & gutter.......next day a 2 man crew with a rescue saw shows up and makes cuts in the road and gutter.....having to move part of my pile...then DPW shows up & complains about my pile.....WTF???????.....says they have to make a patch where the cutout area is...............fine I move some of the pile.......then a few days later Code dept shows up and says unregistered caaaah has to be covered up......the guy was good enough about.....t'aint even my caaah but its my problem b/c its my property
The bigger issue here is that gub'mint will always look to the responsible citizens to right the wrongs of the irresponsilbe.
Example: college kids holligans drink and dope it up and cause problems...........hey it's rite of passage............will never change....what does one one so called city coucilor do...... call for an ordinance that would hold the property owner resposible for the antics of drunken kids who dont even live at the owners property in many cases....(BTW some councilors shoudn't throw stones)
Same thing for any illegal activity..........the property owner is held responsible for things beyond his control......the criminals s/b held responsiblle for their own actions............is the City ever held accountable when stoners overpower the common benches on a warm spring afternoon for an informal Hempfest??......hell no they're exempt from all the laws they pass that effect you & I.........illegal activity s/b addressed by Chief Gemme and his minions and not by me.....whats next my neighbor ax murders his live in GF on my property..........and Germaine wants to take away my axe and the tort lawyers want to take my property.....over somehting I no cotrol over.........
Bottom line....you own the property....you're responsible for all that occurs on it.........even if there's absolutely no nexus betweeen you and the wrong doing
I checked out these condos, they were beautiful. Unfortunately they were a little too far out of my moderate-income budget. I ended up buying a 3 bedroom foreclosure on Vernon Hill instead, for a lot less. It's too bad the project isn't turning out the way it was intended.
Sam went to "In Your Rear College"..Good one Arthur. Don't let Doug hear you say that though!
Post a Comment